Bernard Durkan (Kildare North, Fine Gael)
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Question 117: To ask the Minister for Health if his attention has been drawn to large number of subscribers who are being forced out of private/voluntary health insurance as a result of increasing premiums in each of the past five years to date; if any studies have been done which might compare the extent to which private medicine is replacing the public sector in the context of the general provision of services throughout the country and in terms of absorbing the health budget; the extent to which bed and/or surgical and medical costs in the public sector are comparable with those in the private sector; the extent to which private health insurance premiums are affected by either; the extent to which the total number of hospital beds in both the public and the private sector has fluctuated over the past eight years; the extent to which the health insurance costs relative to each has developed in the same period; if the principle of community rated health insurance is being abandoned or replaced; and if he will make a statement on the matter. [29363/12]

James Reilly (Dublin North, Fine Gael)
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I am strongly committed to protecting the principle of community rating in the private health insurance market. Community rating means that everybody is charged the same premium for a particular plan, irrespective of age, gender and state of health. Community rating needs a robust system of risk equalisation. Otherwise insurers will have a strong incentive to avoid older customers and retain only healthy customers who are less likely to make claims. The Interim Risk Equalisation Scheme was introduced in 2009 to provide direct support to community rating. In order to keep down the cost of health insurance for older people, I was pleased to significantly increase the age-related income tax credit under the Interim Scheme for insured persons aged 60 years and over, from 1 January 2012.

In December 2011, the Government agreed to introduce a new Risk Equalisation Scheme with effect from 1 January 2013 which will replace the present Interim Scheme. The new scheme will allow for a greater number of risk factors than the Interim Scheme, including a measure of health status. The Heads of a Bill to give effect to the new Scheme are being finalised and, subject to Government approval, a Bill will be published as soon as possible so that the necessary legislation is enacted to give effect to the Scheme from 1 January 2013.

My Department has no specific information about the extent to which private medicine is replacing the public sector, if at all, in the context of the provision of services. I can, however, provide information on the numbers of persons currently holding private health insurance. There has been a decrease in the numbers with private health insurance, by just 46,000 in the five year period from end-March 2007 to end-March 2012. This is a very modest decline in private health insurance coverage, at just over 2% of the overall market. Some 2.139 million, or 46.6% of the population, is still covered by private health insurance. Even in the current difficult financial climate, the vast majority of consumers holding private health insurance are choosing to retain some level of health insurance cover rather than allowing policies to lapse completely.

I have set out available information requested by the Deputy concerning the total number of hospital beds in the public sector in a table for circulation.

The Deputy also refers to bed costs in the public sector in comparison with those in the private sector. When individuals elect to be treated privately, they agree to meet the costs of the consultant's fees, which are a private contractual matter between the consultant and the patient, as well as the hospital's maintenance costs. Whilst it is not the role of the Minister for Health to determine costs associated with the provision of care in private facilities which are covered by any private health insurer, I have made it very clear to the Company with the largest share of the market (VHI) that they should increase their efforts to drive down the cost of health care and procedures. Each private health insurance provider has the right to determine which private health care providers and facilities they will cover, subject to providing a minimum level of cover determined by regulation. It is a matter for each insurer to negotiate and enter contracts with the private hospitals concerned, which in turn will be a determining factor in the maintenance cost per bed-day. However, a significant proportion of private patients who are provided with treatment by a public hospital are not currently charged for the services because of current rules on bed designation. It is intended to introduce new arrangements to allow public hospitals to raise charges in respect of all private patients in public hospitals, in keeping with the long-standing policy of moving towards recovering the full economic cost of providing treatment to private patients in public hospitals.

I have also set out available information on the applicable charging rates for inpatient and daycare services for public and private patients in the table for circulation.

With regard to cost of health insurance premiums generally, I would strongly advise consumers to shop around for the health insurance plan that best suits their needs. Consumers have a legal right to switch between or within insurers to get better value and to reduce their premium costs. Where customers wish to switch products, the relevant health insurance legislation ensures that switching is as easy and seamless as possible for customers.

The table below sets out the position in relation to the number of beds in the public hospital system:

Funding and Charging of Public Patients

Inpatient and Daycase Services: Public patients who are admitted as an inpatient or daycase patient are liable for a statutory charge of €75 per day capped at a maximum of €750 in any period of twelve consecutive months. Medical card holders, women in receipt of maternity services and certain other categories of patient are exempt from this statutory charge which is raised under section 53 of the Health Act 1970.

Funding and Charging of Private Patients

Inpatient and Daycase Services: Private inpatient and daycase treatment in publicly funded hospitals is financed via a system of 'per diem' charges. These charges are determined nationally by the Minister for Health and vary by hospital category and by private, semi-private and daycase status. From 1st January, 2012, the 'per diem' charges are as follows:

Charges for Private Treatment in Public Hospitals